US-based Quona Capital, which is a manager of the Accion Frontier Inclusion Fund worth $141 million and Netherlands-based Velocity Capital sees value in South Africa’s fintech start-up, Yoco.

Both fintech-focused institutional investors have invested an undisclosed amount into Yoco and the funding details were scant.

Yoco said the new capital will help it to grow its national footprint, launch new fintech services and lay the groundwork for international expansion in 2018.

Yoco, which competes with Standard Bank-owned Snapscan and iKhoka, enables SMEs to accept card payments and provides card readers, and free point-of-sale and business intelligence tools to its 6 500 South African merchants.

It claims to currently process over R1 billion transactions annually.

The company, says CEO and co-founder Katlego Maphai, aims to become the leading SME brand in Africa, and this round of funding will enable it to build the foundations it needs to achieve that goal.

“This round is a vote of confidence in South Africa’s growing fintech and startup ecosystem. Raising smart capital from seasoned fintech investors will enable us to continue our self-directed journey to grow the SME payments markets through world-class execution, delivered with radical simplicity.”

The company, which was founded in 2013 by Katlego Maphai, Carl Wazen, Bradley Wattrus and Lungisa Matshoba, has undergone prior funding rounds, having raised seed capital from angel investors and seed funds, including the likes of CRE Venture Capital, specialist fintech angel investor Robby Hilkowitz, and Greg Kidd (a first round investor and advisor at Square and Twitter). This is, however, the first funding round it has raised solely from institutional investors and is bigger than previous raises.

Quona Capital is a growth-stage venture firm focused on financial technology for inclusion. The Accion Frontier Inclusion Fund is the first global fintech fund for the underserved and is backed by major investment banks (like JP Morgan), global insurance companies (like Prudential), Fortune 100 payment players and many other prominent investors.

Quona Capital co-founder and partner Monica Brand Engel and Velocity Capital director Allard Luchsinger say their firms chose to invest in Yoco because it has a world-class platform and team, and has the ability to be a driving force in Africa’s SME economy.

“There is a massive opportunity to expand access to, and the quality of, financial services through the digitisation of SME payments and payments data in Africa, where cash still predominates in many economies,” says Engel.

“Yoco is a market-maker,” says Luchsinger, “growing the size of the card payment acceptance market. Seventy percent of the merchants it currently services had never accepted card payments before Yoco made it possible for them to do so.”

Says Maphai: “Since Yoco launched in 2015 we have made it possible for 6 500 South African SMEs to accept card payments, digitise their payments data so they have a record of all transactions, and apply business intelligence tools to help them run their businesses better. We believe enabling card payments is transformative for businesses, and want to be able to do that for SMEs across the continent. This round of funding will enable us to start on that journey.”